Globalization increases, increasingly connecting economies that were isolated. That is why a ‘regional’ crisis like the US mortgage crisis rippled through the world economy. In the years since the Great Recession, globalization has continued. Interest rates have been low. Borrowing has been difficult for the less wealthy, but has been very beneficial and relatively easy for large corporations and governments. As of 2014, the IMF estimates that corporate debt has climbed to $14T, up from $4T ten years earlier. Governments have also been borrowing and printing money, further increasing their exposure. The worry is that, instead of a regional or consumer issue rippling out, major corporations or governments may initiate the next crisis. The US’ political instability, the EU’s economic issues, and China’s growth management are large enough upsets that their impact could be larger, more global, and yet still impact individuals. It is possible that the US Congress, the European Union, and China can simultaneously resolve their individual issues. It could happen.
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